Competition among providers of co-working space is heating up. And it’s not just the big names, such as WeWork and Knotel, building up the community of co-working space.
Hotels are seeking five-star ratings by not only accommodating millennials with their social media, but also catering to the needs of business travelers.
While business travel has been at the lowest mark in a decade, particularly due to the economic uncertainty, there will always be a market for business travelers, which spend an average of $949 on airline costs, hotel fees and other expenses during trips around the United States annually, reported Cetify. And business travelers make up 12 percent of an airline’s passengers but represent 75 percent of the profit. In addition, corporate travel spending is expected to hit $1.7 trillion by 2022 estimated GBTA, using 2018 statistics. Face-to-face meetings will always be critical for businesses, despite the advancement of virtual communication.
Traditional hotel business centers are adapting for modern workers, following the WeWork-style co-working space. The need for a workspace while traveling is becoming an amenity within the lodging community. It allows traveling business workers to be able to stay at their hotel, or to have the “at-home” experience while traveling. And providing co-working space gets guests to spend more time at the hotel while on business trips. A recent JLL Trends & Insight report noted that this trend is a great opportunity for hospitality companies to cater to young, on-the-go freelancers and entrepreneurs. Hotel guests can use the space for free, and locals can pay for a co-working pass or rent a desk per month.
In November 2019, Crowne Plaza Hotels and Resorts announced plans to reinvent its brand for the next generation of entrepreneurs who travel around the world. It partnered with Global Entrepreneurship Network (GEN) as its first exclusive hospitality partner. Flagships of Crowne Plaza Hotels and Resorts will be the new hubs of Startup Huddle monthly meetups, a program designed to help entrepreneurs while strengthening the local ecosystem, providing easier access to spaces for entrepreneurs to collaborate, problem solve and inspire one another. Designed to meet the changing needs of modern travelers, the Crowne Plaza brand's new hallmark design innovations include Plaza Workspace, a co-working lobby design concept featuring flexible workspaces, breakout areas and The Studio, a bookable-by-the-hour meeting space. GEN has more than 15,000 members in 170 countries. With this partnership, select Crowne Plaza hotels will offer them discounted or complimentary access to these spaces for collaboration.
Libby Escolme, global vice president, Crowne Plaza, said in a statement, "We are proud to partner with GEN to support and provide a home for the next generation of entrepreneurs around the world. This partnership comes at the perfect time for the Crowne Plaza brand as we expand our new flexible lobby and room designs in flagship properties around the world. From our lobby concepts to our patented WorkLife guest rooms, our hotels are truly serving the modern business traveler and local business communities."
The Crowne Plaza brand recently announced new flagship properties opening in the United States, United Kingdom, France, Germany and Greater China by first quarter 2020.
Meredith Latham, vice president, Crowne Plaza Hotels & Resorts, Americas, said in a statement: “Travelers continue to evolve; this is especially true for business travelers. What was once known as the business trip is now integrated with leisure experiences. We continuously innovate against those changing needs, so Crowne Plaza Hotels and Resorts can deliver the special design, amenities and experiences to meet or exceed those expectations."
And earlier this year, Accor launched its plan with WOJO to become largest co-working brand in Europe by 2022, opening 1,200 co-working spaces. The WOJO coworking spaces will be launched within Accor hotels worldwide with different offerings across all segments (economy, mid-scale and luxury).
Stephane Bensimon, CEO WOJO, said in a statement: “As we are directly in touch with companies and workers on a daily basis, we have a thorough understanding of their needs and expectations in the work space. A personalized welcome, premium services, a friendly atmosphere and designer spaces are all essential features covered by our expertise. Through our new range of spaces, we are now able to meet a key customer need: combining the quality of work life with mobility.”
The hospitality world is not the only sector that has identified and evolved to meet changing work environment trends. Multifamily towers are renting out units to the usual hotel guests: tourists and corporate travelers. And workspaces are becoming an attractive amenity for residents.
Also, in the food industry, restaurants are now opening up tables for business workers. Many of the places that offer co-working in restaurants are establishments that are only open at night, providing a co-working table that is intimate, quiet and affordable during regular work hours. Companies such as Spacious, which WeWork acquired in August 2019 and is currently selling, and KettleSpace provide this service in San Francisco and New York City on a subscription basis.
“Co-working has been occurring in the F&B sector for a long time on an informal basis,” said Adam Griffin, director, food service consulting at JLL, in a statement. “With the popularity of co-working continuing to rise, many restaurants are now looking at it as a new opportunity to activate space during morning and afternoon periods that would otherwise be sitting empty.”
Even the fitness sector is coming into the co-working industry. This year Equinox, the luxury fitness club with more than 100 locations across the United States, Canada and London, opened its first five-star hotel in New York’s Hudson Yards. It has also partnered with Industrious. Operating under the co-brand Industrious at Equinox, the first location will be at 35 Hudson Yards, the same location as Equinox’s 100th Fitness Club and the first-ever Equinox Hotel.
Born out of strong demand for an all-encompassing experience that includes opportunities to live, work, play and exercise in one seamlessly designed property, the partnership marks the launch of a new category for Equinox — and across lifestyle verticals more broadly.
“Equinox is always looking for new ways to empower our community to perform at their best and maximize their lives, so we saw an opportunity to create workspaces that are as inspiring as our clubs. With so many of our members already spending significant time working in our clubs, our partnership with Industrious is truly a natural extension of our brand,” said Jeff Weinhaus, president and chief development officer, Equinox. “The Equinox at Hudson Yards footprint is a true haven for high performance, offering visitors, guests and members opportunities for living, eating, regenerating, working out — and now working — in New York’s most highly-anticipated neighborhood.”
The U.S. flexible workspace market is now the largest in the world with 5,300 centers, surpassing the United Kingdom, which currently has 4,563 centers, according to the report “The Pioneers and the Pathfinders” by The Instant Group. More than 3,000 operators fall into the independent category in the United States, representing about 50 percent of total supply and 85 percent of all operators.
With more than 500 locations, New York City still leads the flexible workspace market in the United States. San Francisco has seen supply increase by 35 percent against a 7 percent increase in demand, while Phoenix saw demand increase by 80 percent. This year has also seen franchising begin, as operators make a play to quickly put locations in secondary and smaller markets across the United States.
